Will more funding generate better academic results in primary school - A quasi-experimental study of the centralization reform in Stockholm 2007

Abstract: The fact that education plays a major part for wealth of nations has been known for quite some time, but the debate over the true relationship between school funding and student performance is ongoing in both academia and among policymakers. They all want to answer the same question - how can the returns of education be maximized? We use a centralization reform in Stockholm from 2007 to estimate the causal e_ect of increased school funding on student performance. We study three measurements: Grade point average, the amount of students that at least got a pass in every class and the amount of students that got the grades required to graduate. The studied schools are public primary schools in Stockholm. The study was done by using a di_erence-in-di_erence approach with GPA, Pass and Grad as our outcome variables. Our _ndings show that the reform created clear winners and losers in terms of school funding and that the majority of school budgets were unchanged. Our results however show no statistically signi_cant short term e_ects on student performance whether a school was a winner or not